China Import Delays Could Jeopardize Apple’s India Expansion Plans
Mobile device manufacturers, including Apple Inc. and its assembly vendors, are facing significant hurdles due to growing delays in importing critical machinery from China.
- These delays could threaten the production timeline for the upcoming iPhone 17 and disrupt Apple’s broader localisation plans in India.
- The impact could extend beyond Apple to sectors like tunnel drilling equipment and solar energy machinery, highlighting a broader bottleneck in key technology imports.
iPhone 17 Launch Timeline at Risk
Sources involved in industry discussions reveal that Apple’s traditional schedule of launching one major iPhone model annually is under pressure.
- To assemble new models domestically, manufacturers must retrofit imported equipment, which is now facing serious customs delays.
- There is also concern that second-hand machinery imports, crucial for transferring production capacity from China to India, may soon undergo stricter scrutiny.
Expansion Plans Hinged on Timely Imports
Apple had ambitious plans to more than double its iPhone production capacity in India within the next 12–24 months, aiming to boost output from the current projection of $26–27 billion by FY26.
- This scale-up would allow Apple to meet the entire US iPhone demand from India, bypassing the 20 per cent import duty on Chinese exports currently levied by the US.
- In contrast, exports from India attract zero duty for now, potentially rising to 10 per cent in the coming months, still offering a major cost advantage.
Rising Exports, But Challenges Loom
In FY25, Apple has already exported ₹1.5 trillion worth of iPhones from India, with around 20 per cent of those units destined for the US market.
- However, the rapid scaling needed to achieve 25 per cent of global iPhone production from India by FY26 depends heavily on importing capital equipment without disruption.
- Experts caution that any significant delay could slow Apple’s shift from China, a strategic move which China might resist given its critical economic implications.
New Capacities and Localisation Efforts Underway
Despite the challenges, players like Tata Electronics and Foxconn are moving forward with setting up new production capacities in India.
- Meanwhile, homegrown engineering companies are also working rapidly to manufacture custom capital equipment, supporting the drive toward greater localisation of Apple’s supply chain.
- This approach not only mitigates reliance on Chinese imports but also strengthens India’s standing as a global manufacturing hub.
The Immediate Pressure: iPhone 17 Retrofitting
With May approaching fast, Apple vendors urgently need to import machinery for retrofitting facilities to produce the iPhone 17.
- Besides hardware changes, tweaks in component design and manufacturing processes for local suppliers are necessary to align with the new model’s specifications.
- Any delay in setting up this ecosystem could have a cascading effect on production timelines, launch schedules, and export targets.
